WHOLE LIFE INSURANCE: Advantages and Disadvantages

WHOLE LIFE INSURANCE: Advantages and Disadvantages

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Advantages of Whole Life Insurance

Looking closely at Whole Life Insurance, I think that it is one of best options out there. I say this because of the following advantages the plan offers:

• The premium cost does not increase regardless of how long the policy is in force.
• The policy does not change despite medical conditions.
• The policy lasts for the duration of the policyholder’s lifetime- that means lifetime coverage unless otherwise revoked or until premiums are paid.
• Part of the premium is invested as cash value.
• The insurance provider pays dividends to the policyholder.
• Dividends can be used to pay off the entire policy.
• Cash value can be withdrawn.
• Savings are tax-deferred.
• Option to cash out the entire policy if insured party is old and no longer require death benefit.

Disadvantages of Whole Life Insurance

If there are advantages, disadvantages are just around the corner. The disadvantages of Whole Life Insurance are:

• Premiums are paid monthly unless the policyholder dies. It’s an entire life of paying premiums.
• Fixed premiums are more costly and may limit the coverage.
• Cash value withdrawn will be deducted from the total death benefit.
• When policy is cancelled before the policyholder dies, there would be loss in terms of money and premium paid.